Resmed (RMD) AI Stock Analysis

• Market Cap: $34.02B
• Dividend Yield: 0.92%
• Average Volume (3M): 1.12M
• Price to Earnings (P/E): 22.5
• Beta (1Y): 0.82
• Revenue Growth: 9.36%
• EPS Growth: 29.56%
• Country: US
• Employees: 9,980
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 2.81
• Shares Outstanding: 145,678,400
• 10 Day Avg. Volume: 1,070,407
• 30 Day Avg. Volume: 1,117,839
• PEG Ratio: 0.72
• Price to Book (P/B): 6.34
• Price to Sales (P/S): 7.36
• P/FCF Ratio: 22.78
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 6.09
• Enterprise Value/Gross Profit: 9.99
• Enterprise Value/Ebitda: 15.88
• 1Y Price Target: $296.20
• Price Target Upside: 26.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): 11.06
• Revenue Forecast (FY): $5.64B

• Rating: 80 Outperform
• Price Target: $265.00 ▲(13.49% Upside)
• Action: Reiterated Date: 01/30/26
• Date: Action: Reiterated 01/30/26

The score is driven primarily by strong financial performance (high margins, low leverage, and robust free cash flow) and a favorable earnings call emphasizing margin progress, clear FY26 operating targets, and substantial capital returns. Offsetting factors are a premium valuation (P/E ~26) with a low yield and only moderate technical momentum.

Positive Factors

High profitability and margins

ResMed's elevated gross (~60%) and net (~27%) margins are durable advantages driven by product mix, manufacturing scale and productivity. High margins support reinvestment, R&D and shareholder returns, providing resilience if top-line growth softens and enabling sustained cash conversion.

Robust cash generation and low leverage

Consistent operating cash flow and near‑parity free cash flow to earnings underpin financial flexibility. Low net leverage (debt-to-equity ~0.14 and net cash position) supports ongoing buybacks, dividends and capex for distribution/manufacturing expansion without straining the balance sheet.

Recurring consumables and connected SaaS

Recurring demand for masks/accessories plus SaaS digital platforms increases customer lifetime value and stabilizes revenue. The installed device base and connected care tools drive repeat consumable purchases and stickier provider relationships, supporting durable, higher-margin recurring revenue.

Negative Factors

Slowing top-line growth

Revenue growth has decelerated from prior double-digit expansion to modest single digits, increasing reliance on margin gains and buybacks to drive EPS. If end‑market demand or resupply cadence weakens, sustaining earnings growth will require sustained margin improvement or successful new-product adoption.

Rising SG&A and acquisition-related costs

Higher SG&A, partly tied to the VirtuOx acquisition and increased marketing, compresses operating leverage. If revenue growth stays moderate, sustained elevated SG&A could reduce free cash flow conversion and make it harder to expand operating profit without further productivity gains or cost control.

Dependence on external demand drivers and competition

ResMed's growth outlook depends partly on external factors (GLP-1 trends, primary care adoption, wearables) and channel dynamics. Potential re-entry by large competitors could pressure pricing, share and margins, making execution and differentiation critical to preserve durable growth and profitability.

Resmed Business Overview & Revenue Model

Company Description

ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets. The company operates in two segments, Sleep and Respiratory Care, and Software as a Service. It offers various products and solutions for a range of respiratory disorders, including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, and cloud-based software informatics solutions to manage patient outcomes, as well as provides customer and business processes. The company also provides AirView, a cloud-based system that enables remote monitoring and changing of patients' device settings; myAir, a personalized therapy management application for patients with sleep apnea that provides support, education, and troubleshooting tools for increased patient engagement and improved compliance; U-Sleep, a compliance monitoring solution that enables home medical equipment (HME)to streamline their sleep programs; connectivity module and propeller solutions; and Propeller portal. It offers out-of-hospital software solution, such as Brightree business management software and service solutions to providers of HME, pharmacy, home infusion, orthotics, and prosthetics services; MatrixCare care management and related ancillary solutions to senior living, skilled nursing, life plan communities, home health, home care, and hospice organizations, as well as related accountable care organizations; and HEALTHCAREfirst that offers electronic health record, software, billing and coding services, and analytics for home health and hospice agencies. The company markets its products primarily to sleep clinics, home healthcare dealers, and hospitals through a network of distributors and direct sales force in approximately 140 countries. ResMed Inc. was founded in 1989 and is headquartered in San Diego, California.

How the Company Makes Money

ResMed makes money primarily by selling sleep and respiratory care products and by providing software-as-a-service (SaaS) and related digital health services. 1) Device and mask/accessory sales (core revenue stream): - Flow generators and ventilators: ResMed generates revenue from the sale of sleep therapy devices (e.g., CPAP and bilevel PAP machines) and respiratory devices (including certain ventilators). These are sold through distribution channels such as home medical equipment (HME) providers, durable medical equipment (DME) providers, sleep clinics, and hospital systems, depending on product type and geography. - Masks and accessories (recurring/consumable revenue): A significant portion of revenue is driven by ongoing replacement of patient interfaces and consumables (masks, cushions, headgear, tubing, filters, humidifier tubs, etc.). Because these components wear out and are replaced on a regular cadence, they tend to provide more repeat purchase behavior than the underlying devices. 2) Software and digital health services (SaaS / subscription-like revenue): - ResMed earns revenue from cloud-based platforms and connected care solutions that support patient setup, monitoring, compliance/adherence tracking, and workflow/billing operations for providers. These offerings are typically sold to healthcare providers, HMEs/DMEs, and other care delivery organizations, often under subscription, usage-based, or contract arrangements depending on the product and customer. - Connectivity and data services can increase the value of the installed device base by enabling remote monitoring and ongoing therapy management, supporting customer retention and adding higher-margin recurring revenue alongside hardware. 3) Channel, payer, and therapy-adherence dynamics that support earnings: - In many markets, sleep therapy equipment is reimbursed by insurers or government payers when medical criteria are met; provider customers (e.g., HMEs/DMEs) purchase ResMed equipment to fulfill prescriptions. ResMed’s revenue is realized through sales to these channel customers rather than directly from most patients. - Adherence and long-term therapy usage can influence reorder rates for masks/accessories and the utilization of provider software tools, indirectly supporting repeat demand. 4) Partnerships and ecosystem factors: - ResMed’s earnings are influenced by relationships with HMEs/DMEs, sleep labs, hospital systems, and clinicians who prescribe and set up therapy, as well as by integration/compatibility with provider workflows and health IT systems. Specific partnership terms or named partners not broadly disclosed are null.

Resmed Financial Statement Overview

Summary

High-quality fundamentals: strong profitability (TTM gross margin ~60%, net margin ~27%), conservative and improving leverage (TTM debt-to-equity ~0.14) with strong ROE (~25%), and robust cash generation (TTM FCF ~1.8B) with healthy earnings conversion. The key constraint is slower recent top-line growth (TTM revenue growth ~2.7%), increasing reliance on maintaining margin strength.

Income Statement

Profitability is a clear strength: TTM (Trailing-Twelve-Months) gross margin is ~60% and net margin is ~27%, with operating profitability also strong. Earnings have expanded meaningfully versus prior years (net margin up from ~21–22% in FY2023–FY2024). The main weakness is growth: TTM revenue growth is modest (~2.7%) and is well below the double-digit pace seen in earlier years, indicating a slower top-line trajectory despite strong margins.

Balance Sheet

Balance sheet looks conservative and improving: leverage is low with TTM debt-to-equity around 0.14 (down materially from ~0.38 in FY2023), supporting financial flexibility. Shareholders’ equity has grown steadily, and returns remain strong (TTM return on equity ~25%). Key watch item is that returns are high partly because profitability is elevated; if margins normalize, ROE could soften, but current leverage leaves ample cushion.

Cash Flow

Cash generation is robust: TTM operating cash flow (~$1.9B) and free cash flow (~$1.8B) are strong, with free cash flow running close to reported earnings (~94% of net income), suggesting solid earnings quality. Cash flow coverage of earnings is healthy (operating cash flow to net income ~1.5x). The main drawback is volatility in growth rates across years (including prior periods of negative free cash flow growth), even though recent trends are positive.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	5.40B	5.15B	4.69B	4.22B	3.58B	3.20B
Gross Profit	3.29B	3.05B	2.66B	2.36B	2.02B	1.84B
EBITDA	2.07B	1.91B	1.53B	1.36B	1.18B	1.10B
Net Income	1.49B	1.40B	1.02B	897.56M	779.44M	474.50M
Balance Sheet
Total Assets	8.50B	8.17B	6.87B	6.75B	5.10B	4.73B
Cash, Cash Equivalents and Short-Term Investments	1.43B	1.21B	238.36M	227.89M	273.71M	295.28M
Total Debt	1.00B	851.81M	873.93M	1.58B	917.55M	793.72M
Total Liabilities	2.18B	2.21B	2.01B	2.62B	1.74B	1.84B
Stockholders Equity	6.32B	5.97B	4.86B	4.13B	3.36B	2.89B
Cash Flow
Free Cash Flow	1.79B	1.66B	1.29B	559.30M	195.11M	619.89M
Operating Cash Flow	1.91B	1.75B	1.40B	693.30M	351.15M	736.72M
Investing Cash Flow	-269.02M	-200.04M	-269.78M	-1.16B	-229.92M	-158.46M
Financing Cash Flow	-796.58M	-606.25M	-1.12B	422.87M	-128.36M	-764.63M

Resmed Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 233.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RMD, the sentiment is Negative. The current price of 233.5 is below the 20-day moving average (MA) of 250.15, below the 50-day MA of 253.79, and below the 200-day MA of 259.39, indicating a bearish trend. The MACD of -6.06 indicates Positive momentum. The RSI at 33.01 is Neutral, neither overbought nor oversold. The STOCH value of 6.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RMD.

Resmed Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RMD	80 Outperform	$34.02B	22.47	24.81%	0.92%	9.36%	29.56%
WST	72 Outperform	$17.24B	40.29	16.68%	0.32%	4.90%	-0.26%
BDX	68 Neutral	$46.03B	28.46	6.93%	2.13%	8.23%	-2.04%
HOLX	66 Neutral	$16.75B	23.34	11.01%	―	1.74%	-25.29%
MASI	63 Neutral	$9.19B	-45.07	-17.21%	―	-16.03%	-813.48%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
BAX	47 Neutral	$9.07B	―	-13.78%	2.75%	-21.20%	-325.40%

Resmed Corporate Events

ResMed Announces Dividend and Strong Quarterly Earnings Growth

On January 29, 2026, Resmed’s board declared a quarterly cash dividend of US$0.60 per share, payable March 19, 2026, to shareholders of record on February 12, 2026, with payments made in U.S. dollars for NYSE-listed common stock and in Australian dollars for CHESS Depositary Instrument holders on the ASX, reflecting the 10:1 CDI-to-share ratio and a temporary waiver to defer stock-to-CDI conversions around the ex-dividend date. On the same day, the company reported strong results for the quarter ended December 31, 2025, with revenue up 11% to US$1.42 billion (9% in constant currency), gross margin expanding to 61.8%, income from operations rising 18%, and diluted EPS increasing 15% to US$2.68, underpinned by robust demand for its sleep and respiratory devices, growing contribution from its digital health platform, and solid cash generation, reinforcing its positioning for continued investment-led yet profitable growth in the second half of fiscal 2026.

The most recent analyst rating on (RMD) stock is a Buy with a $300.00 price target. To see the full list of analyst forecasts on Resmed stock, see the RMD Stock Forecast page.